The Columbus Dispatch June 9, 1996, Sunday SECTION: BUSINESS, Pg. 2C LENGTH: 807 words

HEADLINE: INVESTMENT PROGRAMS TEACH STUDENTS HOW REAL WORLD FUNCTIONS BYLINE: Barnet D. Wolf

BODY: ''Going long'' at Ohio State University conjures up the image of quarterback Bobby Hoying throwing a touchdown bomb to receiver Terry Glenn, or to less public acclaim, one of the baseball Buckeyes hitting a home run. But there's another squad of OSU students that has been every bit as successful by ''going long'' - Wall Street lingo for buying stocks. In the six years since the Student Investment Management program was annointed as one of several investment managers of the university's endowment fund, it has doubled the portfolio's value to $ 10 million. At the same time, hundreds of thousands of dollars in cash dividends and interest have been returned to the endowment fund. ''We've done well over the years, and generated a lot of money for the university,'' said Anthony Sanders, a finance professor who guides the investment classes with fellow program professor, Stephen Buser. The OSU portfolio is by far the largest of 40 across the country in which students invest real money, according to Edward C. Lawrence, a banking and finance professor at the University of Missouri-St. Louis. ''Ohio State really broke ground, because it received its dollars from the endowment fund,'' said Lawrence, who tracks college investment groups. Before that, he said, ''the money usually was raised'' through donations from alumni. Student-run investment portfolios are not new. Lawrence was part of what is now the oldest ongoing fund, started in 1952 at Gannon College (now University) in Erie, Pa. Most of them were extracurricular programs. In recent years, however, an increasing number of universities have instituted student investment classes to manage money. In Bexley trustees of Capital University voted two years ago to shift $ 100,000 from its short-term financial account into a portfolio that would be run by executive MBA students in the Graduate School of Administration. Since then, about two-thirds of the money has been spent on stocks, all well-known, blue-chip growth issues, said Richard Stillman, an adjunct professor at Capital who helps oversee the program with Nat Simon, professor of finance. ''The portfolio is still not fully implemented,'' said Stillman, who also is a vice president in the public finance department of The Ohio Company. As a result, the class has no track record. That's not the case at OSU, where hundreds of students - 25 to 30 a quarter - have gone through the investment program. Dozens of them have moved on to jobs on Wall Street, with regional investment firms or state pension funds. ''Somewhere between 10 and 20 go directly into the investment management business,'' Buser said. ''Substantially more use the skills in indirect ways, either personally or in a corporation.'' Unlike most of the college programs, OSU's provides an extra layer of discipline, because it operates - and is judged - as a real investment portfolio. ''The lesson is not lost on the investment community,'' Buser said. But there also is a cost, Lawrence contends, because the students cannot be as creative as they might be if given more freedom. Programs at the universities of Texas and Missouri-St. Louis permit using options, a riskier strategy. Texas Christian University students have ''dabbled a little in real estate'' in their portfolio, which was begun in 1973. But the OSU students also learn that in the real world, institutions place restrictions - and demands - on money managers. Do well, you're rewarded. Underperform and . . . ouch. When OSU's fund outperformed the market a few years ago, the university placed another $ 2 million in the account. But when the fund underperformed the market last year, that $ 2 million was yanked. The students received an extra, important lesson: Politics, not just the economy, can have a huge impact on stock prices. ''The students bet on a couple of industries, like health care and tobacco, expecting them to do well, although Bill Clinton had indicated he had problems with these industries,'' Sanders said. ''No one expected him to keep his word and declare war on them. But he did.'' The OSU portfolio had grown to as much as $ 11 million before the $ 2 million was taken away. In the past year, however, the students built the fund back to $ 10 million, outperforming the Standard & Poor's 500 in nine of the past 12 months, often substantially. Actually, the student portfolio hasn't changed much in the past year. Its biggest positions - in terms of percentage of assets - are with Paychex, which has tripled in value; Computer Associates International; Worldcom; and General Motors Class E. ''Some people say timing is everything, but we haven't figured out how to teach that,'' Buser said. ''We don't know it ourselves.'' Barnet D. Wolf is assistant business editor of The Dispatch.

DATE: June 10, 1996

The Columbus Dispatch January 24, 1999, Sunday SECTION: BUSINESS , Pg. 1H LENGTH: 963 words

HEADLINE: 'ODD EIGHTS,' INVESTMENT SAVVY HELP OSU MAKE ITS MARK BYLINE: Barnet D. Wolf

BODY: Paul Schultz is feeling vindicated these days. Two weeks ago, the U.S. Securities and Exchange Commission imposed $ 27.1 million in penalties on 28 stock brokerages and 51 of their traders as part of a settlement to wind up an investigation of Nasdaq Stock Market trading abuses. The multimillion-dollar fine was the cherry atop a big sundae - last year's record $ 1.03 billion settlement of a federal class action lawsuit by investors who had accused 37 brokerages of various trading violations involving Nasdaq. Key to both the SEC and civil actions was the allegation of a price-rigging conspiracy, brought by Schultz, a former Ohio State University associate professor, and William Christie, a professor at Vanderbilt University. In their 1994 article, ''Why Do Nasdaq Market Makers Avoid Odd Eighth Quotes,'' published in The Journal of Finance, the professors alleged ''tacit collusion'' among brokers making a market in certain Nasdaq stocks. The piece became known - due to the large settlement - as the first billion-dollar economics article. Schultz and Christie questioned the widespread practice of quoting stocks for customers to the nearest quarter of a dollar, rather than the nearest eighth, giving market makers considerable extra profits. Market makers are the individuals and companies that make up Nasdaq's backbone. They buy and sell a company's stock from their own accounts and execute customers' orders through the market's national computer network. The authors found that in 71 of 100 actively traded Nasdaq stocks, market makers rarely quoted stocks in ''odd eighths'' - 1/8, 3/8, 5/8 and 7/8. That didn't occur with similar stocks on the New York Stock Exchange. A follow-up study by Schultz and Jeff Harris, then an Ohio State doctoral student, found that market makers suddenly began quoting some stocks in eighths - equal to 12.5 cents - the day stories appeared about the original report. The challenge to market makers created a virtual firestorm. ''We were shocked by the interest in this,'' said Schultz, whose newfound visibility helped him land a professorship and chair at the University of Notre Dame. It ''was like throwing a match on gasoline.'' The term that caught everyone's attention was ''tacit collusion.'' It was a enough to cause Nasdaq to finance two academic studies - one co-authored by Nobel-prize winning economist Merton Miller - that tried to refute the charge. While the word ''collusion'' may have been strong, it's clear that the academic articles prodded the SEC. After all, the American Stock Exchange had complained about similar problems two years earlier, but no action was taken. The Schultz-Christie research also resulted in a Department of Justice investigation and a series of changes by Nasdaq. Schultz said the most gratifying part of his work was not his sudden fame, but that ''it demonstrated to students and to others that the research we do really does matter.'' One Notre Dame publication noted that Schultz - the John W. and Maude Clarke Chair in Finance - had made ''an impact'' in finance. ''We consider Paul Schultz a great addition to our college,'' said Carolyn Y. Woo, dean of Notre Dame's College of Business Administration. Although Schultz is no longer at Ohio State, the university still reaps some gains from the ''odd eighths'' article and The Journal of Finance, which is edited by Rene Stulz, an OSU finance professor. Nasdaq made Ohio State its ''premier partner,'' and provided the business school with several awards, such as a $ 15,000 scholarship. A larger gift is being considered. ''They credit us for reshaping the market,'' said Stephen A. Buser, chairman of the Department of Finance at OSU and former co-editor of The Journal of Finance. Although the previous Nasdaq administration had fought to disprove the Schultz-Christie articles, Buser said the current leaders realize ''it was right on point,'' and ''that type of research'' is needed. For his part, Schultz feels he was ''pretty lucky that I stumbled across'' the odd-eighths pricing. ''I'm always aware of that. But as Steve Buser said, a lot of people stumble across something but most pick themselves up and keep going without noticing'' what they tripped over. Before the ''odd-eighths'' research, the biggest publicity coup by Ohio State's finance department came from its 9-year-old Student Investment Management class, which Buser helped launch. The first SIM class of finance students was given $ 5 million from the OSU's endowment fund in 1990, becoming the first group of American college students to officially manage a multimillion-dollar university account. The student managed account not including dividends and interest, which is paid out as endowment money is now worth $ 16 million. The performance of the OSU account is slightly below that of the Standard & Poor's 500 during the same period. The SIM program has spawned similar ones at other universities, but OSU continues to be a leader. Just this month, William Batten, an OSU business school grad and former chairman of the New York Stock Exchange, committed $ 500,000 to Ohio State's Fisher College of Business to fund the Batten Investment Laboratory. The lab will include video conferencing equipment to link students with financial analysts and executives scattered around the world. The facility also will have a digital stock monitoring system and other state of the art technology. As Ohio State struggles to make its mark among the nation's elite business schools, the loss of Schultz was a step backward. Perhaps the gifts by Nasdaq and Batten will be two steps forward.

Barnet D. Wolf bwolf@dispatch.com writes about business issues for The Dispatch.

Financial Times (London) February 1, 1999, Monday LONDON EDITION 1 SECTION: INSIDE TRACK; Pg. 13 LENGTH: 466 words

HEADLINE: Chicago business school to set up campus in Asia Nijenrode: www.nijenrode.nl

BODY: The University of Chicago graduate school of business has officially announced that it will set up a permanent campus in Singapore. The campus will be similar to its site in central Barcelona where Chicago faculty teach the executive MBA programme and short executive programmes. The campus will be the first permanent site in Asia set up by a US business school. However, Insead, in France, announced last year that it will set up a duplicate of its Fontainebleau campus in Singapore. Classes for the Chicago executive MBA programme will begin in autumn 2000 and are intended for executives who want to study while working. The programme will be taught in 16 one-week modules spread over 19 months and for part of the programme participants will be taught alongside their peers from the executive MBA courses in Chicago and Barcelona. Participants from Singapore will have to travel to Chicago and Barcelona as part of the programme. The new campus is a building with national heritage status and is situated in the Orchard Road section of Singapore. The House of Tan Yeok Nee, as it is called, will be completely refurbished before the start of the programme. Chicago: www-gsb.uchicago.edu Student award scheme The UK's Association of Business Schools will today launch an award scheme which gives £5,000 worth of prizes to management students. The scheme has a number of categories for both undergraduates and MBAs. Closing date for applications is April 30. ABS: www.the-abs.org.uk Investment lab plan at Ohio William "Mil" Batten, former chairman of the New York Stock Exchange, has given $ 500,000 (£303,000) to the Fisher College of Business at Ohio State University to set up the Batten Investment Laboratory. It will be used by the Student Investment Management class, which invests in the stock exchange. In 1990 its investment portfolio was worth $ 5m; today it is worth $ 15m. Mr Batten was chairman of the New York Stock Exchange from 1976 to 1984 and was chief executive of J.C. Penney before that. He is also an alumnus of Ohio State University. Fisher College: www.cob.ohio-state.edu Swiss venue for symposium Students from the University of St Gallen, in Switzerland, and Harvard are organising an International Management Symposium in Switzerland in May and June. The symposium, founded in 1969, traditionally attracts top business leaders as well as students from universities worldwide. St Gallen: www.isc.unisg.ch Kellogg dean's honorary award Donald Jacobs, dean of the Kellogg school at Northwestern University, has received an honorary doctoral degree from Nijenrode University in the Netherlands. The award is to recognise his work in developing and promoting management education.

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